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Timeshare Financing Options: Risky Business?

Timeshare Financing Options

December 10, 2018 – by Primo Management Group

Timeshare Financing Options

Confused about timeshare financing? It’s more complicated than you think.

In timeshare sales presentations, you’ll hear a lot of talk about how awesome timeshares are. Beautiful resorts. Easy, reliable vacations. Living your best life. But your sales rep might not spend quite as much time talking about the elephant in the room: paying for the timeshare. How do people pay for timeshares? Let’s look at the options and risks of timeshare financing.

Developer Financing

Most of us don’t have the $22,180 average cost of a timeshare on hand. That’s where timeshare financing comes in. The most common form of timeshare financing is developer financing. In this case, the developer essentially loans you the cost of the timeshare and that you pay back over time with interest. Although this may seem like the most convenient choice when you’re in the middle of a timeshare sales presentation, you’ll see hefty interest rates ranging from 12-20% that may get decidedly inconvenient over time.

If you fall behind on your payments, which is not at all uncommon, your access to your timeshare may be restricted. So, even if you’ve paid a substantial amount toward your balance, you’ll be unable to enjoy the benefits. And the same energy the resort put into selling you your timeshare will be put into collecting payments from you. Expect collection letters and calls plus negative reporting to the major credit bureaus.

Personal Loans

If the high interest rates of developer loans seem like too much, you can consider an unsecured personal loan. In this case, “unsecured” means that the loan is not backed by anything of value, such as a car or house. This type of loan will have a higher interest rate than a secured loan because if you fail to pay, your lender can’t recoup their losses by taking your car or house. That should probably be a red flag right there: the timeshare you’re about to buy has no intrinsic value as far as lenders are concerned. However, personal loans usually have much lower interest rates than developer loans. And if you go through a reputable lender, you may get better terms than a developer would give you.

Credit Cards

You may not qualify for a personal loan and find yourself considering putting your timeshare on a credit card. Credit card interest rates are usually higher than a developer loan. But some cards offer no-interest introductory rates, so if you can pay off the timeshare within that window, this would be a no-interest way to pay. However, the fine print in your credit card contract may state that a missed payment results in an interest rate hike, and that will be very expensive indeed. Putting your timeshare on a credit card is risky.

Home Equity Loans

Some consumers choose to take out home equity loans to pay for timeshares. Because home equity loans are secured by your primary residence, interest rates are much better. However, you put your home at risk if you are unable to make your payments. Is an “investment in vacation” worth the risk of losing your home? And if you’re wondering if you can get a separate mortgage for your timeshare, the answer is decidedly no. Again, lenders don’t view a timeshare loan as a secured loan. The risks to them are high, so your interest rates will be similarly high.

Write A Check

By now you’re probably thinking that timeshare financing isn’t a great option. Why not just pay up front? Well, paying for your timeshare up front does save you interest payments. However, you need to consider the better uses of that money. Right now, that money is at a minimum in a savings account somewhere, quietly earning interest for you. Even better, it’s invested somewhere savvy, actively and awesomely earning interest for you.

So, why move your money into a timeshare? Your sales rep may lead you to believe that putting that money into a timeshare is an equally good investment. However, even the ARDA will admit that a timeshare isn’t a financial investment. They often call it an investment in vacation or a vacation lifestyle. A financial investment earns money over time. But a timeshare does no such thing. In fact, the value of your timeshare decreases pretty much as soon as the ink on your contract is dry. So instead of earning even the modest interest in a savings account, your money will go to a concept that you can’t resell and that in fact will continue to cost you money in the form of maintenance fees over time. So, think twice before your turn over your life savings to any timeshare company.

As you can see, all timeshare financing options come with real risks. And we see the results of these risks every day. Many of our clients come to us with damaged credit and in danger of losing their homes because of timeshare payments. If that’s you and you’re ready to get out of the timeshare trap, contact us for a free consultation today.

(Image Source: Pixabay)

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Frequently Asked Questions ?

How does PMG get me out of my timeshare contract?

PMG is not a resale, transfer, or donation company. We are consumer advocates—we help to negotiate the release of your timeshare contract obligation. We do not buy, sell, or rent your timeshare. Simply put, we help you to get out of your timeshare contract forever.

How long does the process usually take?

Usually less than 12 months, but it all depends on your situation. If your timeshare is free and clear with no mortgage, then the process may only take 3-9 months.

Speak to your advisor about the time, and what delays the resorts have put into place to prevent timeshare owners from departing their ownership. If you have a mortgage or past due maintenance fee, the process takes more time.

How much is my timeshare worth?

This is probably going to hurt, but whether you paid $5,000 or $50,000 for your timeshare, the IRS values all timeshares as worthless investments. In addition, that timeshare would have negative value due to the annual maintenance fee bill which compounds year after year. That is until PMG helps you cancel your timeshare.

Can I use your service if I still have a balance owed on my mortgage?

Yes. Whether you bought your timeshare 20 days ago or 20 years ago, PMG has a solution for you and is here to help.

Will my name be off the timeshare?

Yes! Permanently! GUARANTEED!

In addition to getting me out of my timeshare, can you recover the money I’ve already spent on mortgage payments and maintenance fees?

While we are able to recover money in rare cases, beware of any timeshare cancellation company that entices you with the promise of fund recovery. The truth is, timeshares are loath to give back the money they’ve already taken.

Are your consumer advocates really “consumer advocates”, or is that just a fancy word for salesperson?

Because most of our clients have had their trust betrayed by timeshare salespeople, we understand how some consumers can become a bit jaded. When you call us for a consultation, that’s exactly what you get, a consultation. At PMG, our job is not to sell you; our job is to help you get out of your timeshare. Which is why we have numerous 5-star reviews and an “A” (excellent) rating from the BCA.

Why should I choose PMG to get me out of my timeshare?

We pride ourselves on providing our customers with the best customer service in the industry. When you contact our company, you speak to a live person, not an automated system or voicemail. We go above and beyond for our customers by helping you to protect your credit and even repair your credit if needed. We offer a 100% money back guarantee, and we can provide documented proof of our success in helping customers just like you.

What happens after I sign up with you? Will I be apprised of your progress?

At PMG, we pride ourselves on our hands-on, boutique-style customer service, so every new client is assigned a case manager whose job is to keep you in the loop throughout the entire cancellation process. Your case manager is always just a phone call away.

How much is your fee?

Not all timeshare experiences are created equal. Some are more complicated than others, and every situation is different. That’s why our trained timeshare elimination consultants will ask you a series of questions designed to determine exactly what needs to be done to terminate your timeshare, how long it will take, and how they can best advocate for you. We will always seek the most cost-effective route for you.

What if I still have more questions?

Canceling a timeshare contract is not a cookie cutter process. With each situation being unique, once you complete the form below an experienced consumer advocate will call you today to discuss your options.